Question 1

Which of the following statements is not correct?

Accepted Answer

A)  Male workers with good looks tend to earn more than male workers with average looks 
B)  If discriminating wage differentials persist in competitive markets, it is primarily because employers chose to discriminate even in spite of customer preferences. 
C)  A higher level of human capital raises a worker's wages. 
D)  In competitive markets, workers are paid a wage equal to the value of their marginal product. 
A)  Male workers with good looks tend to earn more than male workers with average looks 
B)  If discriminating wage differentials persist in competitive markets, it is primarily because employers chose to discriminate even in spite of customer preferences. 
C)  A higher level of human capital raises a worker's wages. 
D)  In competitive markets, workers are paid a wage equal to the value of their marginal product.

Question 2

A 1986 study of segregation on early 20th century U.S. streetcars found that the primary source of racial segregation on streetcars was

Accepted Answer

A)  a longstanding tradition of racial segregation. 
B)  policies implemented by the owners of streetcars. 
C)  laws passed by the government. 
D)  threats by white people to boycott the streetcars if they were forced to sit with black people. 
A)  a longstanding tradition of racial segregation. 
B)  policies implemented by the owners of streetcars. 
C)  laws passed by the government. 
D)  threats by white people to boycott the streetcars if they were forced to sit with black people.

Question 3

The human-capital theory explanation for why people invest in education has been challenged by a theory that suggests

Accepted Answer

A)  schooling acts only as a signal of ability. 
B)  humans cannot be considered "capital." 
C)  productivity is not linked to wages. 
D)  ability, effort, and chance matter more. 
A)  schooling acts only as a signal of ability. 
B)  humans cannot be considered "capital." 
C)  productivity is not linked to wages. 
D)  ability, effort, and chance matter more.

Question 4

George and Brad are waiters at a local restaurant. The female customers think that George is better looking than Brad. If George earns more than Brad, this could be an example of each of the following except

Accepted Answer

A)  customer preferences. 
B)  discrimination. 
C)  a beauty premium. 
D)  a compensating differential. 
A)  customer preferences. 
B)  discrimination. 
C)  a beauty premium. 
D)  a compensating differential.

Question 5

The term "compensating differential" refers to

Accepted Answer

A)  the fact that workers who do similar work should be paid the same wage. 
B)  the fact that some workers live further from their jobs than do other workers. 
C)  a wage difference that is due to unionization of some firms but not others. 
D)  a wage difference that arises from nonmonetary characteristics of different jobs. 
A)  the fact that workers who do similar work should be paid the same wage. 
B)  the fact that some workers live further from their jobs than do other workers. 
C)  a wage difference that is due to unionization of some firms but not others. 
D)  a wage difference that arises from nonmonetary characteristics of different jobs.

Question 6

The characteristics of jobs and workers affect

Accepted Answer

A)  labor supply. 
B)  labor demand. 
C)  equilibrium wages. 
D)  All of the above are correct. 
A)  labor supply. 
B)  labor demand. 
C)  equilibrium wages. 
D)  All of the above are correct.

Question 7

A plumber who specializes in cleaning plugged sewer lines is typically paid a higher wage than a plumber who works on installing water systems in new residential housing. Which of the following would push the wages of plumbers who work on sewer lines higher?

Accepted Answer

A)  Plumbers who work on new residential housing require more training than plumbers working on sewer lines. 
B)  Plumbing jobs that involve sewer lines are likely to have a high element of personal satisfaction. 
C)  Plumbers who work with sewer lines are more likely to work the day shift. 
D)  plumbers who work with sewer lines are likely to be perceived as having a "dirty" job. 
A)  Plumbers who work on new residential housing require more training than plumbers working on sewer lines. 
B)  Plumbing jobs that involve sewer lines are likely to have a high element of personal satisfaction. 
C)  Plumbers who work with sewer lines are more likely to work the day shift. 
D)  plumbers who work with sewer lines are likely to be perceived as having a "dirty" job.

Question 8

After an employer pays the cost of educating a worker,

Accepted Answer

A)  the worker has a higher level of human capital. 
B)  the worker should become more productive. 
C)  the worker might look for another job unless his employer pays him more. 
D)  All of the above are correct. 
A)  the worker has a higher level of human capital. 
B)  the worker should become more productive. 
C)  the worker might look for another job unless his employer pays him more. 
D)  All of the above are correct.

Question 9

Many kindergarten teachers have advanced education degrees, yet they have lower average earnings than other individuals with similar education levels. A potential explanation for the differences in earnings is that kindergarten teachers

Accepted Answer

A)  have more pleasant working conditions. 
B)  have less pleasant working conditions. 
C)  work longer hours. 
D)  must pass certification tests. 
A)  have more pleasant working conditions. 
B)  have less pleasant working conditions. 
C)  work longer hours. 
D)  must pass certification tests.

Question 10

Daryn earns a higher salary than his friend Nick because Daryn is willing to work on the loading dock, whereas Nick prefers to work in an air-conditioned office. The difference in salary could illustrate a compensating differential.

Accepted Answer

A) True 
 B)False

Question 11

Technology is an important factor in explaining the high incomes of some athletes primarily because

Accepted Answer

A)  technology accounts for differences in incomes within all occupations. 
B)  technology makes it possible for very large numbers of people to watch athletes perform. 
C)  technology improves the performance of athletes. 
D)  technology requires human capital to use it efficiently. 
A)  technology accounts for differences in incomes within all occupations. 
B)  technology makes it possible for very large numbers of people to watch athletes perform. 
C)  technology improves the performance of athletes. 
D)  technology requires human capital to use it efficiently.

Question 12

Which of the following statements is true of wages, educational attainment, and gender?

Accepted Answer

A)  Male workers are compensated for attending college, while female workers generally are not. 
B)  Female workers are compensated for attending college, while male workers generally are not. 
C)  Both genders receive a higher wage for attending college. 
D)  Neither gender receives a higher wage for attending college. 
A)  Male workers are compensated for attending college, while female workers generally are not. 
B)  Female workers are compensated for attending college, while male workers generally are not. 
C)  Both genders receive a higher wage for attending college. 
D)  Neither gender receives a higher wage for attending college.

Question 13

Suppose that the country of Libraria made a concerted effort to increase the educational level of its people. If this effort had no effect on the wages of its workers, one might consider this as evidence in support of

Accepted Answer

A)  the human-capital view of education. 
B)  the signaling view of education. 
C)  both the human-capital and the signaling view of education. 
D)  neither the human-capital nor the signaling view of education. 
A)  the human-capital view of education. 
B)  the signaling view of education. 
C)  both the human-capital and the signaling view of education. 
D)  neither the human-capital nor the signaling view of education.

Question 14

The fact that wage differentials continue to exist across different groups of workers leads economists to believe that

Accepted Answer

A)  discrimination by customers is the most common type of economic discrimination. 
B)  differences in human capital and job characteristics must be important in explaining the differences in wages. 
C)  firms apparently are not profit maximizers. 
D)  the market has failed to properly allocate wages to different workers. 
A)  discrimination by customers is the most common type of economic discrimination. 
B)  differences in human capital and job characteristics must be important in explaining the differences in wages. 
C)  firms apparently are not profit maximizers. 
D)  the market has failed to properly allocate wages to different workers.

Question 15

The very high pay earned by the best actors and actresses is partially explained by the fact that

Accepted Answer

A)  they benefit from a compensating differential. 
B)  moviegoers all want to see the very best actors, not second-rate actors. 
C)  they have acting degrees from accredited acting schools. 
D)  the supply of good actors is very large. 
A)  they benefit from a compensating differential. 
B)  moviegoers all want to see the very best actors, not second-rate actors. 
C)  they have acting degrees from accredited acting schools. 
D)  the supply of good actors is very large.

Question 16

Professional underwater divers are known to have high wages and work an average of only 20 hours per week. Which of the following would push the divers' wages higher?

Accepted Answer

A)  The job is simple. 
B)  The job is fun. 
C)  The job is very dangerous. 
D)  The job does not require specialized training. 
A)  The job is simple. 
B)  The job is fun. 
C)  The job is very dangerous. 
D)  The job does not require specialized training.

Question 17

A study by labor economists Hamermesh and Biddle found that

Accepted Answer

A)  shorter-than-average men earn more than shorter-than-average women, all else equal. 
B)  above-average looking people earn more than average-looking people, all else equal. 
C)  shorter women earn more than taller women, all else equal. 
D)  All of the above are correct. 
A)  shorter-than-average men earn more than shorter-than-average women, all else equal. 
B)  above-average looking people earn more than average-looking people, all else equal. 
C)  shorter women earn more than taller women, all else equal. 
D)  All of the above are correct.

Question 18

List three reasons why wages could be set above the equilibrium wage.

Accepted Answer

minimum-wage laws
ma

Question 19

Most wage differences can be understood while maintaining the assumption of equilibrium in the labor market. We deviate from that assumption, however, when we consider

Accepted Answer

A)  the superstar phenomenon. 
B)  the theory of efficiency wages. 
C)  compensating differentials. 
D)  differences in educational attainment. 
A)  the superstar phenomenon. 
B)  the theory of efficiency wages. 
C)  compensating differentials. 
D)  differences in educational attainment.

Question 20

Which of the following statements is not correct?

Accepted Answer

A)  If a firm discriminates by paying short workers less than tall workers, the firm may be able to compete in the market if the firm's customers also prefer taller workers to shorter workers. 
B)  If the government passes regulations that prevent shorter workers from working in higher paying jobs, taller workers may continue to earn higher wages than shorter workers. 
C)  Government regulation that prohibits discrimination is economically necessary because market forces support discrimination. 
D)  Competitive markets will eliminate discrimination in wages over time unless customer preferences also reflect discrimination and/or government intervention promotes discrimination. 
A)  If a firm discriminates by paying short workers less than tall workers, the firm may be able to compete in the market if the firm's customers also prefer taller workers to shorter workers. 
B)  If the government passes regulations that prevent shorter workers from working in higher paying jobs, taller workers may continue to earn higher wages than shorter workers. 
C)  Government regulation that prohibits discrimination is economically necessary because market forces support discrimination. 
D)  Competitive markets will eliminate discrimination in wages over time unless customer preferences also reflect discrimination and/or government intervention promotes discrimination.

Exam 19: Earnings and Discrimination

Which of the following statements is not correct?

A 1986 study of segregation on early 20th century U.S. streetcars found that the primary source of racial segregation on streetcars was

The human-capital theory explanation for why people invest in education has been challenged by a theory that suggests

George and Brad are waiters at a local restaurant. The female customers think that George is better looking than Brad. If George earns more than Brad, this could be an example of each of the following except

The term "compensating differential" refers to

The characteristics of jobs and workers affect

A plumber who specializes in cleaning plugged sewer lines is typically paid a higher wage than a plumber who works on installing water systems in new residential housing. Which of the following would push the wages of plumbers who work on sewer lines higher?

After an employer pays the cost of educating a worker,

Many kindergarten teachers have advanced education degrees, yet they have lower average earnings than other individuals with similar education levels. A potential explanation for the differences in earnings is that kindergarten teachers

Daryn earns a higher salary than his friend Nick because Daryn is willing to work on the loading dock, whereas Nick prefers to work in an air-conditioned office. The difference in salary could illustrate a compensating differential.

Technology is an important factor in explaining the high incomes of some athletes primarily because

Which of the following statements is true of wages, educational attainment, and gender?

Suppose that the country of Libraria made a concerted effort to increase the educational level of its people. If this effort had no effect on the wages of its workers, one might consider this as evidence in support of

The fact that wage differentials continue to exist across different groups of workers leads economists to believe that

The very high pay earned by the best actors and actresses is partially explained by the fact that

Professional underwater divers are known to have high wages and work an average of only 20 hours per week. Which of the following would push the divers' wages higher?

A study by labor economists Hamermesh and Biddle found that

List three reasons why wages could be set above the equilibrium wage.

Most wage differences can be understood while maintaining the assumption of equilibrium in the labor market. We deviate from that assumption, however, when we consider

Which of the following statements is not correct?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

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